Leveraged Equities first to pass on Reserve Bank rate cut in full
Leveraged Equities, part of the Bendigo & Adelaide Bank group, will reduce variable interest rates across their Margin Loan and Investment Funds Multiplier products by 0.25% per annum. The new rates take effect from 13 February 2015.
Alexandra Tullio, Executive, Leveraged Equities said: "Historically low interest rates are good news for borrowers and we are pleased to be able to announce Leveraged Equities will be first to pass on the savings to our customers. In recent weeks we have seen investors new to gearing borrowing to invest, primarily in order to diversify their portfolios and obtain greater market exposure.
"In terms of recent market trends, we're still seeing relatively conservative levels of gearing. New loan applications are steady and while not at the same levels as years gone by, gearing as a strategy is has been sparking renewed interest, particularly in Melbourne and Sydney.
"It is notable that loans today tend to be bigger and a significant percentage of borrowers are now under 35. The number of direct investor inquiries has also been on the rise.
"It could be that, particularly in Sydney and Melbourne, younger professionals have given up on the property ownership dream for the time being and are choosing to rent close to the city or beaches and their social networks while using gearing as a strategy to build wealth with a view to buying a residential property further down the track or when they are in a permanent relationship.
"Eventual property purchase, property upsize and investing for children’s private education are two often cited reasons for beginning a gearing strategy. Both are expensive undertakings and both have seen significant cost increases in recent times.
"Leveraged Equities is committed to providing a premium customer experience as the professional’s choice," Ms Tullio concluded.